Big losses like last week's 2.6% drop for the Standard & Poor's 500 — its worst weekly drawdown since June 2012 — can put a scare into investors. The fear is that one big plunge will lead to another big plunge, which leads to an even bigger drop.

Is that fear rational? If you're talking about how stocks have reacted to similar drops going back to 2011, a span in which the stock market has continued to power higher, the answer is "no." Investors are dead wrong to fear the worst, data from Birinyi Associates show.

In a report titled "What to expect after a difficult week," Birinyi revealed to clients that one bad week doesn't necessarily have to carry over to the following week. On a weekly basis, there have been nine other declines greater than 2.5% since 2011. The next week the S&P 500 gained 0.8%, on average, and traded higher 56% of the time, according to Kevin Pleines, an analyst at Birinyi.

But stock market rebounds of the past shouldn't cause investors to get overly complacent. This time really is different, thanks to currency-related turbulence in emerging markets and angst over the Federal Reserve's move to dial back on stimulus. And despite past history, the S&P 500 tumbled another 0.5% Monday.

"We are maintaining a high cash reserve," said David Kotok, chief investment officer at Cumberland Advisors. "We want to let this foreign exchange currency risk run its course before we again become fully invested."

Traders on the floor of the New York Stock Exchange.(Photo: Richard Drew, AP)